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A Disciplined Approach To New Product Development: Part 2
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By: Darrin Duber-Smith

 

(continued from the previous post "Part 1")

 

The first four steps of the New Product Development Process are as follows:

Idea Generation:  Ideas come from many places, including existing customers, employees, supply chain partners, competitors and, of course, the research and development department. Inviting outsiders to submit advice, concepts, designs, etc., a form of “crowd sourcing”, has become popular of late, and it is obviously a great way for marketers to create and maintain a dialogue with stakeholders, especially key customers where sometimes products are actually “co-created”.  On the other hand many great ideas are the result of brainstorming, a formal, objectives-driven, professionally-moderated session where key thinkers can offer even the wildest of suggestions.

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Idea Screening:  In the Idea Generation phase, no idea is a bad idea. It is important to be open to all sorts of concepts for new products (even the crazy ones), and efforts must be made to insure that creativity isn’t squelched in any way. A blend of group brainstorming sessions, individual interviews, and anonymous surveys is probably the most effective way to properly address the first step of this process. The screening of ideas, however, involves the elimination of impractical, inadvisable, inappropriate and downright impossible ideas before any further time and energy is wasted on them.  The larger list should be whittled down to several plausible concepts that match internal strengths with external opportunities. The most effective way to accomplish this is to have several alternative ideas, develop a list of criteria for what constitutes a good product idea (i.e., financial feasibility, compatibility with organizational competencies, market attractiveness, etc.), weight each criterion based on how important it is to the decision, and then rate each alternative, criterion by criterion, as to how well each alternative idea addresses each criterion. The weighted number is then multiplied by the rating, and so the alternatives with the highest total values are the ones that should be pursued. It is somewhat difficult to explain without a large diagram, but suffice to say that this rather common method is useful for any sort of high involvement decision-making, and the aforementioned developing/weighting/rating process should involve more than one individual to weed out any potential bias, which will surely confound the results.

 

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Initial Concept Testing:  Up until now, the company hasn’t really expended much in the way of resources, especially financial. Here, in-house marketers might choose to engage one or more marketing research firms and endeavor to discover consumer attitudes towards one or more product ideas. Based on feedback, which could involve the general population or specific market segments, concepts are either refined or dropped entirely. But at the very least, marketers can get one or more ideas so they can advance to developing the strategic marketing plan.

 

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Business Analysis/Marketing Planning: There are a few ways to interpret this step, and the author prefers that this be the phase wherein an entire marketing plan is developed. The marketer conducts a situational analysis including internal factors such as current marketing efforts and financial analysis (which lead to strengths and weaknesses) and external factors such as competition, market segment data, and social trends (which lead to opportunities and threats). The resulting SWOT summary tells the marketer much about the feasibility of the project. If it the thoroughly-analyzed situation still looks favorable, measurable objectives for the product can be set along with a budget, and a detailed marketing program developed for implementation. The plan will be refined during the next two stages of product development, but this is where the bulk of the product, pricing, distribution (place), and promotion planning should occur.

 

(the final steps will be revealed in the next post)